* The price of transfer (or the reparation of expropriation)
* And the cost price (or the market value for the possessions acquired by donation or succession).

You have the right to reductions and dejections:

For the long-term surplus:

* Application of a coefficient of currency depreciation

The price of acquisition and its possible rises are revised proportionally in the variation of the annual average indication of the prices in the consumption since the acquisition or the expenditure (to see coefficients);

* Dejection for duration of detention

The property surplus realized more than two years after the acquisition of the good is reduced by 5 % for every year of detention beyond the second.

For all the surplus:

* The domestic dejection for the first transfer of a taxable second home. If you benefit from this dejection, the amount rises in:

40 000 F for a married couple;

30 000 F for the widowers, the bachelors or the divorcees;

10 000 supplementary F by alive child, whose filiation is legally established, or represented (that is died, but a descendant of which at least is alive), that he is or not in responsibility.

You can benefit from it only if you had the free arrangement of the place of residence during at least 5 years in a continuous or intermittent way and have the free arrangement of it at the time of the sale. This condition is not satisfy when the building is let.

This dejection accrues, as the case may be , with the general 6 000-f dejection or special of 75 000 F;

* The general 6 000-f dejection;
* The special 75 000-f dejection applies if you were expropriated or if you gave up your building to the amicable in a public community.

You can not benefit for the same transfer at the same moment from the 6000-f dejection and from the special dejection of 75 000 F.

Example: transfer on March 2, 1999 of a building acquired on September 22, 1989. The surplus declared in 2000 is calculated by making application of the coefficient foreseen for 1989 (that is 1,19) in the following picture(table).

Coefficients of currency depreciation
For the determination most - valuesréalisées in 1998

Year

Coefficient

Year

Coefficient

Year

Coefficient

On 1977

2,90

On 1985

1,34

On 1993

1,07

On 1978

2,66

On 1986

1,30

On 1994

1,06

On 1979

2,40

On 1987

1,27

On 1995

1,04

On 1980

2,12

On 1988

1,23

On 1996

1,02

On 1981

1,87

On 1989

1,19

On 1997

1,01

On 1982

1,67

On 1990

1,15

On 1998

1,00

On 1983

1,52

On 1991

1,12

On 1999

1,00

On 1984

1,42

On 1992

1,09

You are married, and you have two dependent children. You are an owner of your main home, at 600 000 F, and at your second home. In September, 1999, you sell to the 950 000-f price your second home which you had bought in May, 1990 for 420 000 F; on the occasion of this sale, you pay 35 000 F of commission to an intermediary.

You made expenditure of renovation for 30 000 F in 1995.

You paid 36 000 F of interests from 1990 till 1995.

It is about a long-term surplus (more than 2 years of detention of the building).

Price of transfer: 950 000 F

Paid commission: - 35 000 F

Total: 915 000 F

Cost price:

A) Price of acquisition: 420 000 F

Acquisition costs (fixed price of 10 %) 42 000 F

Total: 462 000 F

Application of the coefficient of 1990 x 1,15 F

Total: 531 300 F

B) Works of renovation: 30 000 F

Application of the coefficient of 1995 x 1,04 F

Total: 31 200 F

C) Interests of loan 1 ) 36 000 F

Total cost price:

531 300 F + 31 200 F + 36 000 F = 598 500 F

* Difference: 915 000 F - 598 500 F 316 500 F
* Reduction applicable to the long-term surplus:

The number of years of ownership beyond the 2-nd is equal

In 7 ( 2 ) is 5 % x 7 = 35 % {2}

Amount of the reduction: 316 500 F x 35 % = - 110 775F

* Surplus of transfer 205 725F
* General dejection - 6 000 F
* Dejection for second home ( 3 ):-60 000 F {3}
* Taxable surplus

Total: 139 725F

1) Only can be taken into account for the calculation of the surplus the interests of the loans contracted before January 1-st, 1997 for the construction of a new flat and before January 1-st, 1998 for the acquisition of a former flat.

2) One holds(retains) only the number of whole years: this calculation is made, not a year civil, but by whole period of 12 months from the date of entrance of the good to the patrimony of the assignor.

3) 40 000 F for a married couple more 10 000 F by dependent child = 40 000 F + 10 000 F + 10 000 F, is 60 000 F.

The taxation of the surplus

For the persons taken up residence in France:

* The short-term surplus is integrated, for their total amount, into the other annual incomes of the taxpayer to be subjected to the progressive table of the income tax;
* The long-term surplus is imposed automatically according to the system of the quotient which eases the progressiveness of the tax;
* The surplus is subjected to the social taking of 2 % as well as to the SUPPLEMENTARY SOCIAL SECURITY CONTRIBUTION and to the CRDS for the totality of their amount.

Example

You are married and you have 2 dependent children (you benefit from 3 parts for the calculation of the income tax).

You have a taxable net income of 110 000 F.

The tax corresponding to the taxable 110 000-f base is equal to 3 226 F.

If, besides, you realized in 1999 a long-term surplus of 34500F, the surtax owed in conformance with this surplus is calculated according to the system of the quotient:

* Division by 5 of the taxable surplus: 34 500 F: 5 = 6 900 F
* 1/5 of the total of the surplus is added to the taxable net income:
110 000 F + 6 900 F = 116 900 F

* Tax corresponding to the taxable 116 900-f base = 4 052 F
Tax corresponding to 1/5 of the taxable surplus:

4 052 - 3 328 F = 724 F

* Tax corresponding to the total amount of the taxable surplus: 724 F x 5 = 3 620 F.

Total tax owed in conformance with 1999: 3 328 F + 3 620 F = 6 949 F.

The surplus can be the object, on your demand, of a split payment (by equal parts the tax owed over 5 years according to that of its realization).

The option for this mode of taxation pulls the payability of an interest calculated from the legal rate besides the 1re fraction of tax put in covering. For year 1999, it was fixed to 3,40 %.

The rate applied to the following fractions of tax is the accumulation of the annual legal rates as from the date of stake in covering of the 1re fraction.

You should, in that case , make it the demand on the statement N 2049 " wanted split payment " or " not wanted split payment " centres III (or by complaint presented for the legal period) and to put back the amount of the surplus on the statement N 2042 in lines.

You can give up in aid of the split payment. The due fractions are then the object of an immediate taxation matched by the interest with the legal rate of the year of covering.

The statement of the surplus

You should calculate the surplus on the printed matter N 2049 of statement of the surplus and put back the total amount of the surplus in the corresponding column of the statement of income N 2042 (3-rd page, paragraph 3).